Here in Wisconsin, the average price of regular unleaded is
$2.95 a gallon -- perhaps a little lower than some of you on the coasts are paying, but very near the national average.
Next time you fill up, you might be interested to know exactly where that money is going.
Obviously, each locality's tax structure is different, but here in Wisconsin, that $2.95 breaks down like this:
$1.62 (55% of the cost) for the crude oil...
$0.65 (22% of the cost) to refine the crude...
$0.55 (19% of the cost) to taxes...
$0.12 (4% of the cost) to distribution and the retailer.
Just two years ago, cost of the crude oil was just 86 cents a gallon. Refining the crude was 33 cents/gallon. Each line item has doubled since this time in 2004.
Retailers make very little on gas, which is why there's so little price fluctuation from station to station. If 100 cars pumped 10 gallons each at a Wisconsin gas station, the retailer and its distributor would split about $120.00.
The breakdown makes it a little easier to predict the future of gas prices. The cost of crude has found a "new normal" at $70/barrel. Taxes and retail won't fluctuate much. Refinery costs will bob and weave with the summer hurricane season. Many refineries, in fact, have still not fully recovered from Katrina.
Add summer "demand" into the supply/demand equation, and it's clear that prices are going nowhere but up. Ugly is about to get uglier.
Incidentally, the cost of air for your bicycle tires at a typical Wisconsin gas station: free.
Source article can be found here.